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Wednesday, July 04, 2001

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Bears upbeat

K. Premkumar

RIGHT from the initial hours of Tuesday's trading, the bears were in total control of the market. Bulls were unable to make any recovery during the day. The movement in the Nifty was around 30 points. Bears capitalised the day's entire move. Bear dominat ion terminated the uptrend in the index. The market sentiment reading of the tradable counters changed to bearish.

Bear domination on Wednesday has the potential to initiate a fresh downtrend in the index. The bearish trigger level is placed quite closer to its last traded value. Bullish trigger level is placed quite far away and is unlikely to be triggered. The prev ailing bearish sentiment is likely to continue irrespective of a bull or bear move.

Index Futures Recommendation: The sharp down move on Tuesday had no impact on the recommended levels. The nearby July contract fell by around 29 points with respect to previous day's close. It closed lower, thus giving no opportunity for the bulls to mak e any recovery.

The downside movement has placed the bearish trigger levels in both the styles of trading quite closer to its current level. Hence, bear pressure on Wednesday has the potential to trigger these levels. Bullish trigger levels in both the target and non-ta rget-based style of trading are placed quite far off.

Scrip Recommendation: There were no new entries or exits to the top-20 tradable list. The ranking of the list also remained intact.

Strong bear domination during the day changed the market sentiment of the tradable counters to bearish. It is likely to be further strengthened, if the bears were to dominate on Wednesday. Even, if the bulls were to dominate, the sentiment is likely to r emain the same.

There is unlikely to be any threat for the existing counters in the top-20 tradable counters.

Bear pressure has placed the exit and bullish trigger levels for the existing counters quite far away from the current levels. Traders are left with a lone opportunity by way of selling in VSNL for Wednesday's trading. The counter is at present in the si deways mode. Bear move on Wednesday is likely to trigger its sell level, which is very close to its last traded value.

(Note: All price levels refer to the absolute value of the shares traded on the NSE. There is risk of loss in trading.)

The author is a Chennai-based technical analyst and fund management consultant.

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